The Investigation of Maximum and Minimum Stock Price's Effects as Reference Point on Volume in Tehran Stock Exchange

One of the new approach in finance literature is behavioral finance, that describes behavior of investors and satisfies some of the anomalies that effective market hypothesizes were not able to describe it. One of the statement in behavioral finance paradigm is prospect theory and disposition effect that replies the position of individual during decision making. The disposition effect's base comes from Kahneman and Tversky’s prospect theory, point to construction of the reference points and replies that investors will decide according to their intended reference points. According to this theory, investors are more likely to close positions with gains than they are to close positions with losses. So, individuals define gains and losses relative to the reference point, and are risk-seeking when faced with loss outcomes and risk-averse when faced with gain outcomes. The main goal of this research is inspection of construction of reference point on max and min of stock price of 52 weeks prior reference point and it's effect on volume. Results of research represent with increasing of stock price in compared as max price of 52 weeks prior to reference, volume increases. While with decreasing of stock price from min price of 52 weeks prior, volume approximately remain the same.